New device launches prop up PMI

WINDFALL:The arrival of the high sales season means more orders for technology products and more business for local component suppliers, CIER’s president said

By Crystal Hsu / Staff reporter

The official manufacturing purchasing managers’ index (PMI) last month remained above the neutral mark for the 19th consecutive month at 58.7 as global technology brands launched new devices, supporting local firms in their supply chain, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.

The latest PMI data, which seek to gauge the health of the manufacturing industry, showed that the nation’s export-oriented economy is once again on the course of recovery following a slowdown in the previous months.

PMI scores of greater than 50 suggest business expansion, while values below the threshold indicate contraction.

“The landscape looks fair ahead as the arrival of the high sales season means more orders for technology products and more business for local component suppliers,” CIER president Wu Chung-shu (吳中書) told a media briefing.

Taiwan is home to the world’s largest contract chipmakers, chip designers, as well as vendors of camera lenses, casings, touch panels and other electronic parts used in smartphones, tablets, notebooks and Internet of Things devices.

The sub-index on new business orders fell to 60.4, from 63.2 one month earlier, but indicating business improvement, the survey showed.

The uptrend might extend into this quarter, Wu said.

The sub-index on industrial output held firm at 60.7 and raised the employment sub-index marginally to 57.8.

Almost all sectors reported a pickup in business with the exception of the food and textile sectors, the survey found.

The sub-index on raw material prices registered 75.3, an increase of 2.3 points from one month earlier, as robust demand pushed up costs, according to the survey.

Firms remained upbeat about their business prospects as the six-month outlook sub-index stood at 62.3, despite a mild retreat from 63.8 in August, it said.

“The sell-through of new iPhone models will decide if local suppliers can continue to thrive,” Wu said.

Firms in the non-manufacturing industry also reported positive movements, with the non-manufacturing index standing at 53.6, a separate report by the CIER showed.

However, hotels, restaurants and retailers continued to suffer from a sharp decline in the number of Chinese tourists and a slow season, the survey said.

The hospitality industry has a weak view of business going forward, with the six-month outlook sub-index at 41.7, lower than the 54.9 average for other service-oriented sectors, the survey found.

The private Nikkei Taiwan manufacturing purchasing managers’ index stood at 54.2, about the same from a month earlier.

“The data suggests that the economy remains on course to expansion,” said Annabel Fiddes, an economist at IHS Markit, which conducted the survey.

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